Net vs Retail

Last week I explained (or tried to) how advances work.

This week I will try to explain the two kinds of royalties.

In general, with a very few exceptions, they boil down to this:

1) NET (sometimes called ‘publisher’s receipts’)

This means your share is a % of the amount AFTER everyone else has taken their cut. And by everyone I mean retailer/wholesaler, shipper/dist. In other words, the retail price minus about 45%. (Retailers typically get a 40% discount, or higher, when they buy books from publishers.)

2) Retail (sometimes called ‘list’)

This means your share is x % of the retail price. Say your book comes out next fall & the price is exactly $30.00. Let’s say (to keep the math simple) your royalty rate is 10%. In this example your share would be $3.00 per copy.

Does that make sense? If it does not, two examples below. In both cases, the retail price is exactly $30.00

AUTHOR A has a deal where he gets 17.5% of the net. So for each sale, his share is 2.89 (30-45%x.175)

AUTHOR B has a deal where she gets 10% of the retail. So for each sale, her share is 3.00. (30.00 x.1)